Do you calculate the ROI of your talent management activities?

Posted on March 26, 2013 at 11:33 AM

With economic uncertainty comes the need for greater scrutiny of spend and examination of return of any investment.  But how does this apply to areas of talent management spend?  Are we all justifying our spend, building a business case and looking at the payback on the investment once made?

Our recent survey - Justifying spend in hard times: measuring Return on Investment for 360 and Performance Reviews – looked at just this and took a snapshot of the current practice of ROI measurement and business case creation.

Towards the end of 2012, following questions from customers about how to best demonstrate the value effective talent management can bring, we decided to survey the HR and Learning & Development decision makers with whom we regularly communicate.  We chose to focus our research on two of the most widely-used talent management activities: 360 feedback and performance review, asking these HR and L&D decision makers and practitioners to complete our on-line survey anonymously during December 2012 and January 2013.

The results are in.

  • Less than one fifth of those moving to an on-line system have calculated an ROI figure – although a third of respondents to our survey intend to. 18% of respondents to the survey stated that they had already looked at ROI for their on-line 360 system – and a further 39% plan to.
  • It is a similar picture for those who have introduced on-line performance review systems, with 13% already having looked at ROI and 31% intending to.
  • But a quarter of both of these talent activity respondents commented that they have no intention to look at the return on investment.

It seems the most common reason cited for not looking at ROI to date is because it is thought to be too soon in the implementation – although 35% of those with on-line performance review systems report that they are not clear how they would go through this exercise. To this end, we’re developing a step-by-step guide to help calculate a return on investment figure.

To learn more, read a summary of our findings.

Summary of research findings - Justifying the spend on Talent Management 

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